As focus shifts to RBA policy, the AUD/NZD crosses 1.120

After turning around at the crucial support level of 1.1100 on Thursday, the AUD/NZD pair has since moved sideways. The narrow consolidation range between 1.1105 and 1.1119, which was created during the Asian session, has been violated by the cross. The Reserve Bank of Australia is expected to increase interest rates by 50 basis points (bps) for the second time in a row (RBA).

The RBA will review the Official Cash Rate at its upcoming monthly monetary policy meeting (OCR). According to a Reuters poll, RBA Governor Philip Lowe will increase the OCR for the third time in a row by 50 basis points. The OCR will rise to 1.85 percent as a result. Policy tightening is required in view of the growing pricing pressures in the Australian economy. In the second quarter of CY2022, the Australian Consumer Price Index (CPI) increased to 6.1 percent.

The inflation rate was higher than the prior measurement of 5.1 percent even though it remained 10 basis points below the consensus. By the end of September, the cash rate is predicted by 19 of the 31 economists surveyed by Reuters who have a long-term perspective on rates to be at 2.35 percent or higher. This raises the possibility of the expected fourth consecutive rate rise of 50 basis points.

Kiwi bulls in New Zealand have not benefited from rising ANZ- Roy Morgan Consumer Confidence statistics. The qualitative data now stands at 81.9, an increase over the prior report's 80.5. The labor market figures for New Zealand will be released next week, which is crucial.